Morgan Stanley (NYSE:MS) really likes Tesla Motors Inc (NASDAQ:TSLA). Just a few days ago, the company released a report on the company that set its twelve month price target at $103. That was before the auto maker announced that it was going to take on debt and sell additional shares. Now Morgan Stanley (NYSE:MS) is aiming even higher.
The report boosts its Base Case twelve month valuation for the EV manufacturer by close to 6 percent, leaving it at $109 per share. The bull case may be more interesting to some investors and fans of the company, however. If everything goes right for Tesla Motors Inc (NASDAQ:TSLA), Morgan Stanley (NYSE:MS) thinks the firm could very well be headed for $200 shares in a year.
Tesla Motors Inc (NASDAQ:TSLA) cannot, according to the MS analysts, be valued like another auto company, because of its extraordinary disruptive force in the marketplace. According to the report's estimates, Tesla should multiply its revenues ten times from 2012-2016, thirty times from 2012-2020, and 60 times from 2012-2030.
The bull case requires the following from Tesla Motors Inc (NASDAQ:TSLA). The company would need to become a major player in the electric vehicle market and transition extremely quickly to being a mass market producer. The company would need to be on track to sell 300k units over the next seven years.
The firm will also need to control its costs in order to reach the bull price. Operating profit margins will need to be maintained at 12.5 percent, if the company sells 300k cars, but the price would also work if the company is able to sell 165k units at an OP margin of 15 percent. Tesla Motors Inc (NASDAQ:TSLA) is on the up and up according to this analysis, but at least one other major bank does not agree.
If analysts think the company is on track toward those numbers, Tesla may well reach $200 per share next year.
Bank of America Corp (NYSE:BAC) gave a recent base case price target of $37 to Tesla Motors Inc (NASDAQ:TSLA). The company, according to that report, is incredible, but there is a high level of risk in the EV industry, and because of that, its insane valuation is not currently justified.
Morgan Stanley (NYSE:MS) agrees that there's risk, but sees the base case at $109, and the bear case at $20.